Various forms of games are well known in the prior art. It is often useful to categorize such games on the basis of whether they possess the attributes of prize, chance, and consideration. First, a game may be categorized on the basis of whether it is played in order to win something of value (a prize) or whether it is played for only amusement purposes. Second, a game may also be categorized on the basis of whether participation is free or whether some valuable consideration is required in order to participate in the game. Third, a game may be further categorized on the basis of whether it involves chance or skill.
Games of chance include bingo, casino games (e.g., roulette), promotional giveaway games of chance operated by commercial entities, and games such as lotto games and the rub-off instant lottery game that are operated by most state governments in the United States and various national, provincial, state, and municipal lotteries in other countries.
Games of skill include crossword puzzles, games involving answering questions based on knowledge about specific fields (e.g., history and geography), and games of skill involving more than one player (e.g., checkers or chess).
Subject to certain limited and specific exceptions, it is generally illegal to operate a game involving prize, chance, and consideration in most states of the United States and in most jurisdictions of most other countries. A game involving the attributes of prize, chance, and consideration is often called a “lottery” under the laws of many states of the United States and under the laws of many other countries. Section 319 of chapter 9 of the California code is typical of the laws of many states of the United States and under the laws of many other countries in the way that it defines a lottery as follows:
A lottery is any scheme for the disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or for any share of any interest in such property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift-enterprise, or by whatever name the same may be known.
With certain limited exceptions (described below), lotteries are generally deemed to be illegal by the laws of most states of the United States and under the laws of most other countries. For example, except for certain limited and specific exceptions provided by other sections of California law, lotteries as defined in section 319 are illegal in California.
The exceptions to the laws making most lotteries illegal vary considerably by jurisdiction. For example, bingo games clearly involve prize, chance, and consideration (that is, the player pays money in order to buy a chance to win a prize). Nonetheless, many states in the United States exempt bingo games operated by various charitable and religious organizations from their general prohibition on games involving prize, chance, and consideration.
In addition, the lotteries operated by most state governments in the United States and various national, provincial, state, and municipal also clearly involve prize, chance, and consideration. However, these lotteries are not illegal because of specific exemptions in the laws of their respective jurisdictions.
Also, casino games (e.g., roulette) clearly involve prize, chance, and consideration. However, such games are legal when operated in certain regulated environments in certain jurisdictions. For example, there are legal government-licensed casinos in Atlantic City, N.J., but in no other part of New Jersey. Similarly, there are legal riverboat casinos at certain sites in certain states of the United States and there are legal casinos operated on certain Indian lands in the United States. As another example, a limited number of government-licensed casinos operate in London in the United Kingdom.
In contrast, games that do not incorporate all three of the above attributes (that is, prize, chance, and consideration) are generally legal in most jurisdictions (although the legal status of such games varies considerably from jurisdiction to jurisdiction). Thus, in-store promotional games of chance that offer prizes are legal in most states of the United States because participation in the game does not require consideration. Game tickets for such in-store promotional games are typically distributed freely to any store visitor, regardless of whether the visitor makes a purchase in the store. In addition, the operators of such games typically allow anyone to request a game ticket by simply requesting one by mail or telephone. Thus, the player of such a promotional game is not required to purchase the game ticket or to purchase anything else in order to have a chance to win a prize.
Similarly, newspapers and magazines often run promotional games of chance entailing filling out an entry form that appears in the publication. Again, such games are legal in many jurisdictions because they typically give anyone the opportunity to participate in the game merely by making a replica of the entry form or by requesting a free entry form by mail (without purchasing the newspaper or magazine). Also such games are generally legal in many jurisdictions because they do not possess the attribute of consideration.
Similarly, there are numerous games of chance offered on the internet which permit people to play a game of chance in order to win a prize, but require no monetary consideration in order to play. The sites on the internet offering such games typically expose the participant to advertising messages (analogous to the way that an in-store visitor to a store is exposed to various in-store displays enticing, but not requiring, him or her to make a purchase while in the store). These internet games are generally legal in most (or all) jurisdictions in the United States and in many other jurisdictions in other countries because they do not possess all three of the above attributes (that is, prize, chance, and consideration).
Television game shows that offer prizes (whether on the basis of skill alone or a combination of chance and skill) are generally legal because contestants do not pay for the opportunity to participate.
In addition, there are numerous competitions involving skill games (involving, for example, prowess in chess, jigsaw puzzles, golf, bridge, scrabble, and other activities) where the player pays an entry fee in order to participate and in which a prize is offered to the winner of the competition. Such competitions involving skill have the attributes of both prize and consideration. However, if the game involves involve pure skill (such as chess or a jigsaw puzzle, such as the “Eternity Game” in the United Kingdom offering a prize of 1,000,000 pounds sterling), the game does not have the attribute of chance. Competitions involving games (with prize and consideration) that involve pure skill are generally legal in most states of the United States and in many jurisdictions of other countries.
On the other hand, competitions involving games (with prize and consideration) that involve a mixture of both chance and skill (e.g., draw poker) are legal in far fewer jurisdictions. Many jurisdictions apply a test of whether the activity contains any chance whatsoever and, if it does, the activity is deemed to be illegal. Some jurisdictions apply a test of whether the skill component of the activity predominates over the chance component. The determination of whether the skill component of a particular game predominates over the chance component depends on the application of the legal criteria of the jurisdiction involved and the details of the design of the particular game involved.
The prior art contains certain inventions that combine an ordinary casino game of chance with an additional play step based on skill. For example, U.S. Pat. No. 5,718,429, entitled “Method of Combining a Casino Game with a Game of Skill,” issued on Feb. 17, 1998, combines a casino game of chance with a second game based on skill. Winning in such a game first requires success in the casino-style game of chance and then additionally requires success in a game of skill.
Network communication, such as the internet, is well known in the prior art. The use of such network communications for the purpose of commerce (so-called electronic commerce or e-commerce) is also well known. There are numerous internet sites that offer various goods and services for sale. It is common in such internet commerce to accept payment by the use of the buyer's credit card. It is not unusual for such sites to require that a potential buyer provide additional information, such as the billing address of the credit card in addition to the credit card number before processing the sale. It is not unusual that access to most of the pages of an internet site are restricted to persons who have preidentified themselves to the operator of the site by providing, for example, their name, their physical address, demographic information, and their credit card account number.
There are a number of internet casinos in which players pay (typically by credit card) in order to enter a casino-style game of chance (such as roulette) in order to win a prize. These internet casinos are typically located physically in Antigua and other off-shore locations. Such internet casinos typically accept participation from players located in the United States who communicate with the off-shore site by means of the internet. After paying for the opportunity to play, the game of chance is played over the internet for a chance to win a prize. The games offered by such internet casinos possess all three of the attributes of prize, chance, and consideration and would be clearly illegal if conducted inside the United States in the same manner. Most observers believe that such internet casinos are probably illegal in the United States under existing state and federal laws (see Cabot 1999; Sinclair, Schneider, and Balestra 1999) and probably illegal in many jurisdiction of other countries, although this issue has not been adjudicated in the courts to any significant degree as of the time of this writing.